WILLMAR — The Willmar City Council’s Community Development Committee has approved a request from Jennie-O Turkey Store to vacate a portion of former state Highway 40 in front of its headquarters and production plant for a possible expansion project.
The committee met Thursday afternoon and approved Jennie-O’s request to vacate a portion of former Highway 40 from the intersection with Willmar Avenue Southwest west to the Hoting property, which is located at the intersection with County Road 5.
The State of Minnesota turned back Highway 40 to the city a number of years ago and the city renamed the highway Industrial Drive Southwest.
Jennie-O is looking to expand its corporate offices as soon as this summer and is looking at the possibility of expanding the production plant northward across former Highway 40 into a 27-acre tract in the new industrial park.
Committee member Bruce DeBlieck said staff has worked hard on the project and he offered a motion, seconded by Jim Dokken, and approved to hold a public hearing Feb. 3 to consider vacating the road.
The council will consider the recommendation Tuesday.
Steve Renquist, executive director of the Kandiyohi County and City of Willmar Economic Development Commission, has been working on the proposal with Bruce Peterson, director of the city Planning and Development department.
Peterson said discussion of the project dates back to late 2007. Peterson recommended the council proceed with vacating the highway.
“Jennie-O wants to do a significant project now and lay the groundwork for a subsequent project,’’ said Peterson. “In order for the city to make that happen for them, we need to proceed with the vacation of that portion of former Highway 40.’’
After that is done, the actual site development planning with Jennie-O can begin, which will require the council to consider land purchase agreements, options, and tax increment plans and proposals, he said.
Renquist said the office expansion is a strong indicator that Hormel, Jennie-O’s parent company, is willing to allow Jennie-O to maintain its local offices rather than be combined with Hormel’s corporate headquarters in Austin.
Renquist said the office expansion wouldn’t make as much sense if it didn’t look like someday there could be other expansion, and he said the other expansion probably wouldn’t happen if the corporate offices weren’t here.
“We’re entering into a process where we have an opportunity to facilitate what could be a major corporate expansion in the city of Willmar,’’ said Renquist.
Later on, Renquist said the city will also be asked to consider a number of other things to enable the corporate growth to continue.
He said the road surface and utilities will be removed. Renquist said he will advocate the use of pay-as-you-go tax increment financing to pay the company back for what some people could arguably say could have been a city obligation to prepare the new industrial park for growth.
He will advocate for the use of the municipal industrial park municipal land buy-down program based on new assessed valuation and jobs created, and the company will want a purchase agreement for both the office expansion and plant expansion.
Stressing Jennie-O’s economic impact, Renquist said the company has 3,300 employees within 100 miles and a payroll exceeding $180 million. He said 2,000 employees live within 30 miles of Willmar.
In the past two years, the company has paid over $18 million in annual bonuses to hourly employees and farm workers. He said the company has 150 jobs in the corporate offices, and he said 100 jobs will be moved to Willmar, over half paying over $50,000 per year, not including bonuses or benefits.
Also, he said corporate purchases are $300 million to $400 million in feed as well as $250 million more in outside services and supplies.
“You get just an idea the impact of this company and why we want to facilitate their continued existence of their headquarters element here and prepare the way for what would be … a future distribution center, future production facility,’’ Renquist said.